Internal marketing as a change management tool

Journal of Marketing Communications Vol. 16, No. 5, December 2010, 325–344

Internal marketing as a change management tool: A case study in re-branding Sherry Finney* and Mette Scherrebeck-Hansen Shannon School of Business, Cape Breton University, Sydney, Canada This article examines the rational, power and political considerations of internal marketing (IM) when implementing a change management initiative, such as re-branding. Based on the findings of a qualitative case study of a Canadian university and the views of multiple stakeholder groups, additional considerations have been identified that relate to the transformation or ‘control’ stage of change. Particularly, tactics have been presented that are believed to facilitate the transition or re-branding process. This research provides important perspective on the role of IM in the context of organizational behavior. Using a grounded theory research method, an adapted model is proposed that comprises elements of internal marketing as well as change management. Keywords: internal marketing; change management; re-branding; internal communication

Introduction Internal marketing (IM) has been used as an effective force in business management for decades. Some of its applications include creating an internal customer orientation, increasing employee motivation to work toward a common goal, increasing productivity, improving staffing procedures, and changing organizational culture, among others. However, internal marketing as a tool for creating or facilitating change in a re-branding situation is one area that has received little attention in the literature to date. The main purpose of this paper has been to apply a model that has been proposed as a tool for internal marketing, and adapt it to demonstrate how it might be used for a change management initiative, such as re-branding. Theoretical background The concept of internal marketing The concept of internal marketing has been discussed intensely in the literature for the past two decades, and originally, it was best known as a technique by which to deliver high service quality (Berry, Hensel, and Burke 1976). Over time, however, other applications were recognized and these were deemed to represent three distinct phases of development in the IM realm (Rafiq and Ahmed 2000). Specifically, George, Thomson et al., Sasser and Arbeit, and Murray (as cited in Rafiq and Ahmed 2000) acknowledged the importance of IM as an appropriate tool to increase employee motivation and satisfaction. Jobs were viewed as products and emphasis was placed on creating job satisfaction among

*Corresponding author. Email: [email protected] ISSN 1352-7266 print/ISSN 1466-4445 online q 2010 Taylor & Francis DOI: 10.1080/13527260903023916 http://www.informaworld.com

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employees. Another application of IM related to its ability to create increased customer orientation (Gronroos 1981). Gronroos believed that marketing-like activities could be used to motivate personnel to be customer conscious and sales minded. Finally, Winter, George, and Flipo (as cited in Rafiq and Ahmed 2000) argued that IM could be used to facilitate implementation of strategy and change management. As a technique, IM can ‘manage employees toward the achievement of organizational goals’ (Rafiq and Ahmed 2000, 452). While this expansive application has certainly caused the concept to become popular in the literature, it has also been cited as the cause for the lack of development of theoretical models (Rafiq and Ahmed 2000; Varey and Lewis 1999) and the confusion regarding exactly what IM is and how it is to be done. Rafiq and Ahmed argued that before IM could be implemented, a precise definition of the activities encompassed by the concept was required. They set out to address this gap in the literature. Based on an in-depth analysis of the conceptual and empirical literature over a 20-year timeframe, Rafiq and Ahmed (2000) presented what they considered the five elements of internal marketing: employee motivation and satisfaction; customer orientation and customer satisfaction; inter-function coordination and integration; marketing like approach to the above; and finally implementation of specific corporate or functional strategies. While this definition is certainly expansive, it facilitates labeling of IM activities more easily when compared to a more general definition such as that proposed by Keleman and Papasolomou-Doukakis (2004, 122): IM is a ‘managerial initiative that views internal relationships and structures within the organization to be governed by the exchange logic that presides over external markets’. Resultantly, it can be concluded that IM represents a convergence of a number of previously separate management applications, including but not limited to human resource management, employee relations, strategic management, quality management, corporate communications, and macro-marketing, among others. The following section provides a brief overview of some of the previously noted disciplinary antecedents of IM. The ability of IM to facilitate improved levels of service quality has been frequently cited in the literature (Gronroos 1981; Jaworsky and Kohli 1993; Quester and Kelly 1999; Varey 1995b). One such example has been provided in a case study by Lings and Brooks (1998). In their research, IM was identified as being those actions or processes undertaken by the various internal suppliers. There was not a formal internal marketing plan or program implemented, as such. However, a positive relationship was reported between IM efforts and service quality measures. Closely related to the focus on service quality is the connection of IM to customer satisfaction. Just as companies are concerned with the satisfaction levels of external customers, they should be similarly concerned with the satisfaction of internal customers (i.e. employees, etc.). This assessment is based on comparisons between expected and delivered value (Piercy 1995). Having an internal market orientation has also been closely linked to human resource management (HRM) practices and employee relations (Rafiq and Ahmed 1993). According to Lings (1999) an internal focus fosters the transfer of information within a company and this facilitates successful relationships with the external market. Lings also states that this approach has evolved from the total quality management (TQM) philosophy. The basis of this is that each individual or group can either ‘satisfy or dissatisfy the recipients of their output’ (1999, 254). This begs the question ‘what are the needs and wants of internal customers?’ According to Lings, they can be categorized in two manners: those needs that relate to employment and those that relate to the need for quality input from other internal departments. This emphasis on internal interactions and motivation to increase internal service quality is believed to directly affect employee

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satisfaction and external measures of service quality. Similarly, Ballantyne (1997) reports on a longitudinal study that assessed IM as a relationship development process. Particularly, the study considers the internal network of relationships and the sharing of information for the creation of ‘know how’. The internal marketing activities are believed to encompass acquiring the willingness of staff to strive toward a stated goal, engaging in customer problem solving and improving internal communications. Another example of an HR perspective taken on IM was provided by Bak et al. (1994). This time, however, it was believed that IM could facilitate a ‘management by team’ approach with those employees who were in direct contact with customers. Results have included enhanced leadership skills, increased innovation, and increased awareness of the interconnectedness of the different parts of the organization. Organizational culture is also believed to be an antecedent discipline of IM. Particularly, IM promotes commitment among employees toward organizational goals. Achieving this integrated culture is believed to be central to any IM program (Keleman and Papasolomou-Doukakis 2004). An example of culture change fostered through IM is evidenced in the article by Hogg, Carter and Dunne (1998), which describes a program entitled Investors in People (IIP). The program was primarily a human resources (HR) initiative focused on employee training and development for the purpose of achieving the strategic goal of growth. A carefully planned and implemented communication strategy was an important component of this IM plan. Finally, IM has also been recognized as an effective tool for strategy implementation and change management (Piercy and Morgan 1991; Winter 1985). It is believed that IM can be used to overcome inter-organizational conflict and promote effective internal communication (Flipo 1986). IM is also considered to be a necessary component of any change management strategy (Rafiq and Ahmed 1993). In the instance of the present research, internal marketing is explored as a tool to facilitate acceptance of organizational change, specifically in the form of re-branding. Table 1 provides a summary of internal marketing conceptual antecedents. Internal marketing for change management The introduction of change in any organization is always a difficult task. However, the need for and benefits to be realized through change make it an inevitable occurrence in any business setting. As a result, there has been significant research devoted to the successful management of change initiatives. A review of the literature in the field of change management reveals a wide variety of models and frameworks. In an effort to develop a framework that would effectively teach change agents how to go about implementing an innovation, Angehrn and Atherton (1999) conducted an extensive review of the available change management models. In their view, all change management models can be categorized into one of four possible groups: prescriptive step models; problem solving models; models supporting IT specific change; and finally, models introducing diagnosis tools and approaches to support change. However, while each kind of model differs in its approach, the authors have suggested that there is, to a degree, some commonality among the models about the key ingredients required to implement a successful change management program. Further, Angehrn and Atherton (1999) have introduced their own four-stage cycle that involves visioning, planning, implementing, and reviewing/learning. Based on their extensive literature review, they have summarized what they consider to be the characteristics of each of the stages in the cycle they have introduced. As well, they have

High service quality Customer orientation Strategy implementation Internal communication

Strategy implementation

Service quality Employee relations

Human resource management

Employee satisfaction Service quality

Relationship development

Culture change

Service quality Employee relations

Human resource management

Employee motivation, customer orientation, change management Organizational culture

Berry et al. (1976) Gronroos (1981) Winter (1985) Flipo (1986)

Piercy and Morgan (1991)

Jaworsky and Kohli (1993) Rafiq and Ahmed (1993)

Bak et al. (1994)

Piercy (1995) Varey (1995a)

Ballantyne (1997)

Hogg et al. (1998)

Lings and Brooks (1999) Lings (1999)

Quester and Kelly (1999)

Rafiq and Ahmed (2000)

Keleman and PapasolomouDoukakis (2004)

Conceptual antecedent

Author

Table 1. Summary of internal marketing conceptual antecedents.

IM creates an integrated culture by focusing employees on organizational goals

Satisfied customer-serving employees will translate into satisfied customers Motivated employees will be customer focused and sales-minded IM can be used to educate and motivate staff toward institutional objectives Internal communication is required for strategy implementation and IM can be an effective tool The same techniques used for the external market place should be used to market change within the company A marketing approach to motivate employees must be inter-functional IM techniques such as coordinated promotional and communication tactics and internally focused market research can enhance HRM IM can be used to holistically manage multiple functional areas. This must be accomplished before external marketing can occur effectively Measured based on comparisons between expected and delivered value Presents a model as a process for building organizational capability in order to enhance service delivery Relationship development facilitates the sharing of information and improves employee ability to solve problems Communication strategy was believed to have facilitated attitude toward organizational growth A positive relationship was found between IM efforts and service quality measures Focus needs to be placed on assessing the needs of your internal customer, which include employment needs quality input from other departments IM is seen as an effective motivational activity and organizational size appears to affect the selection of IM activities Summary of major developments in the literature addressing the concept of internal marketing

Principal findings & miscellaneous comments

328 S. Finney and M. Scherrebeck-Hansen


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further identified the key competencies required for successful implementation of each stage. It was felt by these researchers, however, that while there appeared to be strength behind the inclusiveness of this model, the research itself lacked in its applied methodology. Stewart and Kringas (2003) have also studied the change management literature and have determined that the variety of change management models may be categorized as being either ‘rational’ or ‘changing’. A rational approach focuses on planning, problem solving and execution. The changing approach is more sociological in nature and focuses on the uniqueness of each situation. Stewart and Kringas made another interesting observation, which was that the actual process of ‘change’, in fact, changes as it is initiated within the organization. Stewart and Kringas support the idea of studying the organization from different levels in order not only to measure the success of the implementation, but also the dynamics of the process. Because change is a process, in order to measure its effects, one needs to freeze the process at one or more points in time. This view by Stewart and Kringas is likely an extension of Lewin’s (1951) work, which purported that change initiatives do not take a permanent hold. Therefore, in order to acquire long-term change, there must be unfreezing, moving to new level and then freezing. As well, Penfold (1999) cites a model introduced by Boddy and Gunson (1995), which, in turn, is based on Lewin’s seminal ‘unfreeze – move –refreeze’ model. The four stages of their model include: preparation; unfreeze old systems and attitudes; move toward new attitudes and systems; and refreeze in new form. Penfold also introduced her own model that can be applied specifically to the implementation of a change initiative that relates to a new technology. This framework can act as a guide for those change agents who are just starting to plan their change initiative or it may be used as a checklist for those who have a change project underway. Research by Branch (2002) also involved reference to Lewin’s (1951, 1958) three-phase model of change – unfreeze, move or change, and refreeze. Other theories introduced include conflict theory, action research and discrepancy theory. All address individual and interpersonal aspects of change. According to Lewin, change in an organization can occur in a variety of ways: the people might change; the structures or the systems might change; or the organizational or interpersonal climate might change. Another model introduced by Robertson and Seneviratne (1995) incorporated the elements of technology and physical setting as elements of change. Their model of change has three phases: planned change interventions create changes in characteristics of the organization itself. Because the organization provides the context or work setting within which individuals behave, appropriate changes in this context will lead individuals to change their behavior, which is the second phase. Third, because the behavior of organizational members is a key determinant of organizational outcomes, behavior change will have an impact on the nature of these outcomes (Robertson and Seneviratne 1995, 550).

As a result, there is a need to tailor change management strategies according to the characteristics of the organization and its environment. Christensen and Overdorf (2000) have emphasized the difficulty in meeting the demands of organizations as well as the evolving conditions. Therefore, identification of the perfect formula for successfully achieving change might be difficult because the environment is constantly changing. Further, work by Goleman (2000) revealed that part of a leader’s success in achieving change was due to their ability to apply different leadership styles under different circumstances. Finally, according to Nadler (1981) there are three main issues associated with the implementation of change: power; resistance; and control. The result of his work is the

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introduction of a framework that seeks to integrate all other available frameworks and models of change management. Nadler and Tushman’s (1980) Congruence Model of Organizational Behavior is based on the general systems approach, which views behavior as a result of inputs, transformation processes, and outputs. Nadler and Tushman’s model takes the transformation stage and looks at it in more depth. According to their perspective, the transformation process is seen as a product of the task at hand, the individuals involved, and the formal and informal organizational arrangements. It is the control of the transformation stage where change occurs. The main focus of their research is how the transformation can be managed so that change is effective. Specifically, Nadler and Tushman suggest that effective change management requires attention to the potential problem areas previously identified and implementation of suggested actions to address such problems. Resistance should be addressed by instilling a need to motivate change; control must allow for management of the transition, both before and after the state of change; and power is addressed through support of the development of a power center, which in turn, supports the change initiative. As evidenced, there is substantial literature that considers the process of change management and how the process should unfold. There is a belief, however, that stakeholders play a significant role in changing organizations and in order to motivate employees, the employees must believe that something is wrong and something needs to change (Armenakis and Harris 2002). It is in the creation or realization of this belief that IM can play a role. Recent work by Causon (2004) concludes that people resist change because the old way of doing things is always easier; she believes that IM is necessary for employees to understand the reason behind the change. Similarly, Rafiq and Ahmed (1993) support this notion as they see IM as a planned effort to overcome organizational resistance to change and to align, motivate, and integrate employees toward the effective implementation of corporate and functional strategies. Finally, work by Piercy (1990) reveals that effective change requires a resourced and realistic implementation process that confronts the structural and process issues that have been aligned with new strategies. One mechanism that has been proven effective for addressing this issue is IM (Causon 2004; Piercy 1990, 2002; Piercy and Morgan 1991; Varey 1995b). According to Piercy (2002, 401), ‘Internal marketing provides the skills and tools to make implementation effective.’ In fact, Piercy and Morgan (1991) go as far as stating that internal marketing is unavoidable because marketing plans and strategies imply organizational change; they further purport that it is not enough to analyze external markets in order to carry out the organizational change, and acknowledge that it is naı¨ve to think that marketing plans and strategies will sell themselves to those whose support is needed. While the research is limited, there is clear support of IM as a mechanism to facilitate change. Re-branding is one such instance where IM might be used to gain internal employee acceptance of the new ‘brand’. Change management for re-branding A brand may be defined as ‘a name, term, symbol, design or a combination of them intended to identify goods or services of one seller or a group of sellers and to differentiate them from those of competitors’ (Kotler, Keller, and Cunningham 2008, 126). According to Restall and Gordon (1993), however, the concept of brand extends beyond the tangible elements and includes psychological aspects such as the perception of the brand in the mind of the consumer. This perception is guided by the mission of the corporation, and the values that define the corporation, both of which are represented by the brand. In the


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instance of re-branding, though, a decision to change the name of an organization is sending a signal that something much more than the name of the organization has changed (Stuart and Muzellec 2004). Along with discarding the old name, the corporation is indicating that it is also discarding its old associations. This process is not without its challenges. According to Muzellec (2006), the new brand must address the heritage of the organization while setting a new strategic direction for the future; it must identify with both internal and external stakeholders; and finally the new brand must identify with the industry and its needs while attempting to maintain the corporation’s universal values. Altering the name of an organization is a major change initiative that requires extensive planning on the part of any organization. In effect, it has been felt that it may be one of the most sensitive changes a company can make because it goes to the core of the organization (Causon 2004; Daly and Moloney 2004; Tosti and Stotz 2001). There is huge risk that the change will fail if the employees do not adopt the new name. The literature supports the notion that re-branding only succeeds if employees are committed to enacting on the new brand (Fram and McCarthy 2004; Thomson and de Chernatony 1999). Thomson and de Chernatony (1999) refer to this commitment as an intellectual and emotional buy-in among employees. The more willing employees are to buy in, the better they communicate the message to others. It has been noted by many that internal brand building seems to be successful only through the use of an IM process (Berthon, Ewing, and Hah 2005; Thomson and de Chernatony 1999; Tosti and Stotz 2001). However, if an organization does not successfully market its brand internally, they should expect to fail externally as a result (Causon 2004). Therefore, the requirement for successful internal acceptance of brand change requires employees to become ‘brand champions’ and cause affect among peers and customers (Fram and McCarthy 2003). Despite the support for IM as a management tool to facilitate a wide variety of business functions, there is limited research that has produced models that demonstrate the implementation of IM plans. Piercy and Morgan’s Model of Internal Marketing The literature reveals that few authors have touched on the barriers involving the implementation of an IM initiative, regardless of its purpose and intended outcome. Some authors suggest that the principles of external marketing should be applied to the internal market in order to carry out any type of marketing initiative (Mitchell 2002; Piercy 1995). However, a recurring theme is the lack of research on the barriers and problems facing implementation of IM (Barnes, Fox, and Morris 2004; De Bussy, Ewing, and Pitt 2003; Piercy 1995; Varey and Lewis 1999). A detailed literature review has revealed one model which analyzes the organizational barriers that occur when attempting to introduce an internal marketing plan (Piercy and Morgan 1991). The Internal Marketing Model (Piercy and Morgan 1991) is intended to isolate the real nature of the practical barriers faced in the implementation process of a marketing plan. It is proposed that the model will help an organization to make sense of the barriers and, thereby, match strategies to avoid them during the planning phases of change. The model distinguishes between three levels of resistance: (1) rational analysis, which involves techniques and systems (i.e. an external marketing plan); (2) the level of power, which addresses the structure, status, and participation of those who are formally responsible for organizational outcomes and who accrue further influence and status from this formal role (Piercy 1987); and finally, (3) political analysis, which considers individuals or groups who influence outcomes. Through this model, the three levels of analyses are applied to the internal target markets.

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Further, Piercy and Morgan’s model suggests that the IM plan must be regarded from four perspectives: product; price; communications; and distribution. Product is defined as values, attitudes, and behaviors among employees that will be affected by change. Price is determined by what we are asking internal target markets to pay when buying into the marketing plan (i.e. reprioritizing other projects or psychological aspects of how the job is done). Communications is how the media are used to influence the attitudes of stakeholders. Finally, distribution addresses the manner that the product is delivered (i.e. formal meetings, HR department, training, or evaluation and reward systems). Piercy and Morgan’s idea of linking the rational, power, and political influences with the internal marketing program was done in an attempt to identify the barriers faced during the implementation of an internal marketing plan. Specifically, the model is intended to extend beyond the ‘techniques and systems’ of an internal marketing program and consider more particularly such questions as ‘who runs this organization?’ and ‘who has influence?’ As admitted by Piercy and Morgan (1991), their Internal Marketing Model does not provide cases for instant success; however, it does provide insight into problems and barriers of organizational change. Despite this being possibly the only model that addresses the theory of internal marketing barriers, an extensive review of the literature has not revealed any instances in which the Piercy and Morgan model has been applied. There are several researchers (Bell, Menguc, and Stefani 2004; Foxall 1999; Longbottom et al. 2006; Murgolo-Pore, Pitt, and Ewing 2002; Voss et al. 2004), however, that have acknowledged Piercy and Morgan’s work and its support of IM as a tool to effect customer satisfaction. Work by Rafiq and Ahmed (1993) set out to define the boundaries between internal marketing and human resource management and in doing so, they examined the marketing program of the Piercy and Morgan model and extended this to also include Booms and Bitner’s (1981) extended marketing mix items: physical evidence; participants; and process. The research described in this article was exploratory in nature and its main aim was to apply Piercy and Morgan’s Internal Marketing Model and uncover the rational, power, and political influences experienced by an organization undergoing organizational change, specifically a re-branding situation. However, in addition to the testing of Piercy and Morgan’s model, a secondary aim was to uncover any additional barriers that might be encountered. A case study approach has been selected and the organization is a Canadian university that has recently implemented major organizational change in the form of a name change. The case study unit: A Canadian post-secondary institution A Canadian university college was chosen as the case study unit due to the interesting nature of its recent strategic changes. Over a period of approximately 30 years, the establishment had evolved from a small technical institute offering trades and diplomas to a degree-granting institution. Until the early 2000s, the school had realized significant growth and much of its student base had come from the immediate geographic area. However, recently recruiting had become more difficult as the local population base declined. It was also felt that there was a secondary problem with the positioning of the institution. As a result, international and domestic recruiting outside the province became more important and the university’s governance felt that an image and name change were required. One key recommendation for the new positioning involved removing ‘college’ from the institution’s name and re-establishing itself solely as a university. The Board of Governors initially introduced a new name that did not contain any reference to the


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geographic location, whereas the original name did. The rationale behind dropping the reference to place in the name was the supporting evidence that a negative perception was attached to the place name by the market. There was much controversy expressed by the public and many members of the institution’s internal community. It was speculated that it was the strong community sense of the people and their connection to their place that made them resist the choice of a name that did not relate this information. The debate over the name lasted several months. Eventually, the Board of Governors changed the decision to a new name that would reflect the geographic location. Research design and methodology A qualitative case study was selected, as the main aim of the research was to uncover people’s views and experiences. Berg (2004) has stated that case studies enable a systematic gathering of enough information about an organization to permit an effective understanding of how the subject under consideration operates or functions. Further, when organizational and management processes are being studied and discussed, as is the instance with the current research, a case study approach has been deemed to be very effective (Yin 1989). While it might be argued there are limitations to the current study primarily due to the case study approach and small sample, there is other research surrounding the benefits of case study methodologies that deserves attention. Specifically, it has been argued that research that is context-dependent, like case study research, is valuable in that it creates a type of learning that generates expert activity (Eysenck 1976; Flyvbjerg 2006). Flyvbjerg (2006, 222) explains, ‘If people were exclusively trained in context-independent knowledge and rules, that is, the kind of knowledge that forms the basis of textbooks and computers, they would remain at the beginner’s level in the learning process.’ Therefore, the current research is valuable as a contributor toward concrete, practical knowledge. A second criticism of case study methodology centers on a common belief that cases cannot be generalized. Flyvbjerg (2006) and others (Eckstein 1975; Ragin 1992; Rosch 1978), however, have argued that a researcher’s ability to generalize findings from a case study is based on the selection of the case itself. For instance, if a researcher wants to get the greatest amount of information possible about a phenomenon, a ‘representative case’ or sample may not be the best approach: ‘The typical or average case is often not the richest in information’ (Flyvbjerg 2006, 229). A ‘critical case’, however, can have strategic importance (Flyvbjerg 2006). The re-branding attempt by the case study unit in this research may be considered a critical case given that there was so much controversy surrounding the change initiative. Sample description Ten semi-standardized interviews were held with representatives of all stakeholder groups present at the time of the implementation of the name change. Specifically, the breakdown was as follows: faculty and staff (3); management (2); students and alumni (3); users of campus facilities (1); and community (1). More participants were selected from certain groups because it was believed they were more significantly affected by the re-branding change. Faculty included professors and lecturers of various ranks, while staff generally included administrative support staff. Management included higher-level administration staff that had some decision-making authority in the daily operation of their department/academic unit. Alumni included graduates of the university college. Users

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of campus facilities were defined as people who do not work at the university college or attend the university college for educational purposes; however, they do periodically use campus facilities such as the rink, gymnasium, theatre, etc. Community members were defined as people who live in the immediate geographic area but do not have any affiliation with the university college. Finally, students were defined as individuals who take classes either part-time or full-time at the university college. All participants were selected based on judgment sampling. It is recognized that judgment sampling does not allow for direct generalizations because the sample has been entirely subjectively chosen (Malhotra 2004). While it is recognized the sample size is small, it does however, provide wide-ranging inclusiveness of the majority of stakeholder groups. The objective of the research was to determine from a comprehensive perspective, barriers to a re-branding change. The consulted sample addressed this. Data collection All subjects received a list of guiding questions prior to the interviews in order to ensure they had enough insight into the topic. Some questions were constructed based upon the model of Piercy and Morgan (1991) and focused on the elements of the internal marketing program. Other questions more generally asked about various elements of organizational change (i.e. timing, media influence, awareness, barriers, implementation process, etc.). The data analysis followed a hybrid approach of conceptual analysis (Palmquist 1993 –2006) and constant comparative method (Glaser and Strauss 1967). The aim of the content analysis was to identify the marketing program and the barrier elements introduced by Piercy and Morgan, as well as to uncover any other undiscovered themes. Findings and proposed adaptation of Internal Marketing Model Piercy and Morgan (1991) state their model is a useful tool for managers to visualize barriers and find ways to avoid these barriers and improve the implementation of the plan. These barriers are primarily addressed through the power and political levels. Through this research, however, it seemed there was also need to consider practical implications or control issues. To explain further, the interviews revealed additional barriers/issues that needed to be controlled and these resulted primarily during the transition stage. As a result, literature surrounding change management models was reviewed and it was concluded that the model proposed by David Nadler (1981) was considered to be the most comprehensive in terms of a framework for identifying barriers to change as this model presents itself as an integration of all other available frameworks. Nadler posits that change is seen as presenting three major problems: resistance; control; and power. He further states, ‘These imply a need to motivate people to change, a need to manage the transition, and a need to shape the political dynamics of change’ (Nadler 1981, 191). This case study revealed clear evidence of each of these issues at work. Based on these findings, it seemed appropriate that a new model be proposed that would allow practitioners to consider the elements of the marketing program from the change management perspective, particularly in terms of the most prevalent barriers to change. As outlined in the literature review, there have been no other models of change management that have addressed the kinds of barriers that have been evidenced in this case study. Therefore, a new model is proposed that combines prior works of Piercy and Morgan and Nadler. The ultimate decision to create the new model based on works by the aforementioned researchers was driven by a grounded theory research method. The goal of the research


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was to understand the problems as experienced by the identified stakeholders. A secondary goal was to understand the concepts as they relate to one another. Using an open coding approach and following the technique outlined by Palmquist (1993 –2006), categories were created. Simultaneously, relevant literature was reviewed and became another data source. Literature was compared to the emergent theory. More specifically, barriers to change identified in both Nadler’s (1981) and Piercy’s models helped to create the final themes; however, they did not constrain the identification and emergence of new barriers. Particularly, through this process there was a fourth theme not covered by either of the two aforementioned models, which needed to be addressed. This resulted in an extension to the existing models. The process continued of memoing and sorting the resultant themes and matching them with the marketing program. The resultant theory is demonstrated in a model that is a proposed adaptation to the existing Piercy and Morgan (1991) model. This is shown in Figure 1, and is titled, A Model of Internal Marketing for Re-Branding. The following paragraphs explain the quadrants of the new model and provide examples. According to Piercy and Morgan (1991), the most elementary level within their model is the Rational level, which presents uncomplicated explanation of the marketing program: the product is the plan itself; the price is the opportunity given up; the communications provide information, research, and justification; and the distribution occurs through written plans/presentations. It is suggested this level remain unchanged in the new model because its application is almost entirely the same, with the exception of the product. In the adapted model, the product should become ‘re-branding initiative’. The Rational level

Internal Marketing Program

Rational

Resistance

Power

Control

Product

Change management initiative

New strategic direction – ensure stability/security Counteract ideological resistance Shared values, culture, image Know stakeholders

Individual’s job, status Stakeholder future position

Change in management control Present vs. future state Brand protection

Price

Opportunities given up

Psychological adjustment to change

Status

Loss of control

Communications

Information research support

Persuasion, influence & image building Targeted message

Sponsorship by key players, commitment, agenda-setting

Directives re: management of change

Distribution

Written plan presentations

Formal & informal communications Social interaction Media Internal/external

Participation Media Company policies

Written plan/face-to-face presentations

Figure 1. A Model of Internal Marketing for Re-Branding.

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of the model is more of an explanatory stage; however, its importance should not be underestimated. In this case study, there is evidence the communication may have broken down or was never initiated in the first place. About half of those interviewed, exclusive of management, indicated they were unaware the institution’s name was about to change, or had only heard rumors about a new branding initiative. Therefore, before they knew that a name change was being considered, the selected name was announced. One manager commented, ‘People might feel they were intentionally left out, and eventually you (organization) will be putting out fires.’ Similarly, one of the student respondents stated, ‘I just heard about it through class discussions and informal conversations.’ Only two of the participants, who were both management personnel, indicated they had seen a marketing plan justifying the name change. A staff member commented they ‘received the news through emails’. Other comments by staff were that the lack of communication ‘created mistrust’ and ‘you cannot expect people to buy in to things they do not understand’. The results of the interviews demonstrate the change was not properly communicated, at least in the perspective of some. This lack of effort at the Rational stage likely contributed to the resistance, power, and control barriers. What was previously referred to as Political within the Piercy and Morgan model, however, is now called Resistance in the adapted model. The product is the goal to sell the new strategic direction of the company. Additionally, in this stage there is a need to counteract ideological resistance. This was evidenced in the case study when the alumni respondent, a staff member and some students indicated the original name was better than at least the first name proposed. Further, it was felt by some that the major reason for the change, as cited by the organization, was not in line with the values of the community and certain stakeholders who held opposing views. One front-line staff member stated, ‘I could not buy in to the fact that their research showed (geographic place name removed) had a negative marketing impact.’ Conversely, on a personal note, a few respondents felt that it was not necessary to change any personal values in order to accept or be able to implement the new name. In fact, one student respondent indicated that he/she valued the university more after the change and said; ‘I feel more pride toward the institution now.’ This comment referred to the fact that the new name eliminated any reference to ‘college’. Only one respondent, who was a staff member, indicated they valued the university less after the change mainly because the school was ‘weak’ for changing the original name decision due to the pressure from the local community. Finally, there needs to be an understanding of who the stakeholders are exactly, so that any resistance can be countered. In the instance of the case study at hand, there was a misconception about who the stakeholders were and how much power they, in fact, had. A majority of respondents, including management and staff members, noted that the local community had exhibited a kind of ownership of the university, which had not existed before, or at least had not been considered. As one manager noted, ‘I was surprised that people with little stake exploded to the name change.’ Based on this comment, it is not surprising that certain stakeholder groups were not identified. The new image was also very much the product being promoted at the Resistance level. Therefore, there needs to be emphasis on promoting shared values, culture, and image. As noted by one front-line staff member, if there is a lack of awareness regarding the motivation for change, ‘employees cannot reflect the wanted image’. The price to be paid includes psychological adjustments to the change. In the present case study, there was much fear on the part of many of those interviewed, with the exception of management, that the first proposed name would disconnect the institution from the geographical location. It was not that these individuals were necessarily against a name change, just one that might result in the institution losing


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its placed-based identity. Therefore, there might be something unique about a re-branding change when the brand is place-based. For all managers and one staff member, however, the name change was welcomed and the psychological adjustment was minimal, but this sentiment seemed to be most expressed by those who understood the rationale for the change. This leads to a very important conclusion surrounding the communication that must occur and the focus of the message. At the Communication level, persuasion, influence, and image building are primary concerns, and in the instance of this case study, the persuasion and influence must focus on the rationale for the change for certain audiences and the rationale for the specific choice of name for others. The interviews further revealed that management may not have been concerned enough with generating internal buy-in. One staff respondent said, ‘Few things were done to ensure my motivation . . . I don’t think they cared what I thought.’ Staff members and one student said they would have liked management to be more concerned with their opinion on the matter. Finally, distribution at the Resistance level occurs primarily through informal communications and social interaction. However, it is also believed based on the case study that formal channels, as well as the media play important roles. The majority of those interviewed believed that employees as well as members of the community are equally influenced by media reports, particularly if employees are not receiving enough communication internally. One front-line staff respondent commented, ‘employees are more likely to believe the external media – it creates a parent – child situation’. Another statement of a similar nature by a staff member included: ‘if the employees get the information about a change through the media, they will be on edge’; and the community member said, ‘in a small community they (media) have huge influence’. It can be concluded, therefore, that change agents need to be aware of this and realize the influence of the media. Formal communication channels inside the organization should also be part of the implementation plan. The next level is titled Power, the same as that proposed by Nadler. With the exception of the Product, the remainder of the marketing program is similar to that presented by Piercy and Morgan under the same heading. At the Power level, the product promoted focuses on the individual, the job and/or position, and the perceived/realized status. Emphasis should be placed on explaining any potential changes (loss or gain) in power as a result of the change. Another consideration to be promoted at this level concerns the possible need for the organization to change its attitude concerning the level and degree of power held by the various groups. One senior manager respondent stated that they (community) would ‘destroy our school if we didn’t listen’. Also noted in the interviews was that a large part of the power struggle occurred to the surprise of some senior internal administrators. The level of interest and influence expressed by the outside community came somewhat as a shock. Finally, at this level, it is important to market stakeholder positions after the transformation stage. For the case study organization, one very important transformation that occurred after the name change was the ease with which front-line personnel were able to explain the identity of the institution. Some staff and management respondents indicated that being characterized as a university only made it possible to position the school with other competitors in the marketplace. As a result, front-line personnel were very positive when this was realized and in a sense, it gave them more power in their jobs. This kind of change and the positive results that these individuals gained in their jobs is what needs to be communicated at the Power level. With respect to price, any proposed or possible change in status is the price of conforming to the change. For some senior university administrators, the price was the concession that there were multiple stakeholders with unknown power, namely the community and government.

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As a result, these senior administrative personnel experienced a loss in power when they became aware of the authority of other groups. For front-line personnel, the price might be the degree of chaos to be experienced for a short time during the change process. Several of those interviewed noted the change process was very chaotic and they felt surrounded by pessimism in their daily jobs because of a lack of control. The communication at this stage needs to center on sponsorship by key players, within and outside the organization, commitment, and agenda setting. Finally, distribution needs to include participation on all levels, and where applicable, company policies regarding communication methods need to be applied. The interviews demonstrated the majority of the participants did not think the change agents performed to the best of their abilities. Some members of staff, students, and alumni thought they did not take people’s opinions seriously and others felt they did not provide or gather enough information from the public. In the case of implementing a new name, a staff member, who was employed as a recruiter, said that employees are the lifeblood of a company, and a name would never be properly implemented if employees were dissatisfied with it: ‘we are selling an image and if people see endless bickering and fighting, they will not be focused on the values and credentials we offer’. Therefore, there needs to be emphasis that the communication should be two-way. Further, the media are also expected to play roles surrounding the power play among the various stakeholders. In the case study example, several interviewees noted that the local newspaper was a very influential outlet for those both supporting and opposing the name change. It was further expressed that the more repetitive a news story is, the more likely people are to believe it, regardless of the truth of the story. Staff said that if they receive organizational information through the news rather than from management, they are more likely to be nervous and suspicious of the change. In the case study, all employees agreed they received only two emails: one introducing the idea of a proposed name change and the second stating the final choice. Students indicated they heard about the proposed name only through class discussions and informal conversations with peers. They received no direct communication. Finally, the alumni representative also noted that she did not receive any direct information. It is quite possible that had a communication plan been better formulated much of the resistance and power struggle may have been countered. The final ‘problem area’ as proposed by Nadler (1981), concerns Control. With any change initiative, control is something that needs to be managed because there is disruption in the normal course of business management. Management finds it difficult to monitor progress and there is often a fixation on the future state. There is also difficulty in the fact that the current business systems are designed to manage the current state, not the transitional one. In this case study, it appeared the frontline personnel experienced the greatest struggle. During the implementation phase, there was much confusion surrounding the promotional material and recruitment activities, for instance, which forced the frontline personnel to respond with reactive tactics and dismiss many past practices. Further, resistance from a promotional aspect occurred mainly because of the timing. The recruitment department faced barriers in creating new strategies and consistency in their recruiting efforts due to the timing. The timing of the change seemed to be one of the greatest factors in barrier creation. The poor timing caused many promotional problems for recruitment and management. As one staff member said, ‘we were putting out fires trying to change the brand, while protecting our existing brand because it was in the midst of recruitment season’. A less significant barrier was the loss of established market recognition that in the changing phases hindered some of the front-line personnel’s willingness to fully implement the new name. In addition, many employees experienced the change as an opportunity cost in the sense that the issue kept them from


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planning ahead and thinking of new initiatives. It seemed the issue of change became all consuming to many as evidenced by the following statement made by a manager: ‘my mind was focused somewhere else’. The implementation phase was very ‘messy’ and some employees felt surrounded by pessimism in their daily job process. When looking at this control issue from the promotional mix perspective, issues are presented that address the practical management concerns of the transition. From a product point of view, stakeholders need to be sold on the concept that they are facing a change in management control and as a result, there will be difficulty in monitoring progress. Additionally, they need to be reminded they cannot forget the present state, while focused on the future state. As well, it needs to be realized the current brand needs protection while the future brand is being built. The price is the loss of control, but this can hopefully be managed or reduced with proper planning and anticipation. The communication at this level should focus on directives to address the management of the change and how to still address the current state. For instance, communication should emphasize tactics that stakeholders can implement to facilitate or ease the change. It is very likely the communication for the control phase may vary according to stakeholder group. This requires more research. Finally, the distribution should include written directives, and face-to-face communication. Other important elements of communication during the control phase concern the message content, choice of delivery agent, and timing of communication. In the case study, it was revealed that university alumni were not utilized in any capacity to facilitate communication or to build support for the change, and the alumni representative interviewed felt this was a missed opportunity. Also, internal interviewees said the email correspondence received regarding the name change was not effective as it was received after the fact. According to some staff members and students, it ‘made the participants feel as if their opinion was of no importance to the institution’. In an effort to control the change, there needs to be particular attention paid to the details of the communication plan (i.e. timing, message content, media choice, etc.). The vast majority of all resistance factors introduced in Piercy’s model have been retained within the new adapted model. Only two were removed and this was primarily because they were not evidenced in the case study. Further, while the adapted model retains many of the factors associated with various ‘problem areas’, as noted above, they might now be applied to a different ‘problem area’. The case study has also revealed new barriers specific to a re-branding change initiative and these are reflected in the model. In summary, it is believed the adjustments have produced a model that presents a more comprehensive summary of potential barriers for this particular type of change initiative. Conclusion This paper has addressed the barriers/considerations of an internal marketing program when facing a significant organizational change project, specifically a re-branding initiative. As mentioned, an in-depth literature review has revealed limited research on the barriers of internal marketing and little or nothing that considers it from an organizational change standpoint. It has been suggested that in order to apply IM as a method to create ‘buy in’ and acceptance of a re-branding change, it is necessary to consider the ‘problems’ associated with the management of change process. Using the case study of a Canadian post-secondary institution and its plan to re-brand, we have learned how change agents can create acceptance of the change by considering resistance, power, and control issues and treating each like it requires an individual marketing program. After applying the Internal Marketing Model to the case study, the

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change management literature was consulted, and it was determined that the research proposed by Nadler (1981) was complementary to the Piercy and Morgan (1991) model. Elements from both prior works were combined to provide a framework and this was further developed with data uncovered in the re-branding case study. The concept that IM can be used to introduce change is not new; however, as mentioned there is very sparse literature that has attempted to formulate the barriers from a marketing mix perspective. Therefore, from a theoretical perspective, this work has made a significant contribution. The new model clearly links change management with internal marketing and identifies the barriers that could potentially occur. There is no prior research that has aimed to present internal marketing in this manner, yet so many researchers have agreed that it makes sense to do so. Therefore, it is anticipated this model, like the model of Piercy and Morgan, can be used to help organizations implement a marketing plan. Resultantly, the practical benefits of this research are clearly evident. With the barriers identified, managers can more easily identify appropriate strategies and tactics for developing proactive solutions. This kind of approach ensures a planned and organized effort when attempting to manage the change process. For the change agents, following a process like this facilitates a smoother transition because a significant number of the barriers are uncovered and can be anticipated. Further, the final Control element introduces ideas for facilitating the transition process. Resistance and power, or similar elements, were found in Piercy and Morgan’s model and the model was effective in addressing the barriers encountered on both these fronts. However, it is in the control or transformation phase where additional barriers are faced and managers need to know and understand the practical implications of such a project. The proposed model will be a starting point to help management understand how they should address an organizational re-branding situation. The current research, however, is significantly limited given that it is based on a single case study and uses a small, but representative, sample. Regardless of the constraints, preliminary views on how change management can work together with IM are introduced and there is a starting point for future research that might further refine the proposed model. The relevance of this new model to the field of marketing and/or corporate communications is quite significant because it places focus on the importance of the role played by internal marketing. This case study has provided evidence of a situation that resulted in turmoil within an organization because of the lack of internal communication and the lack of recognition of stakeholder groups. Marketers and any other organizational players involved in facilitating change need to realize that the process of creating acceptance involves much more than a marketing mix program addressing just the rational elements. Issues surrounding resistance, power, and control also need to be anticipated and managed. These elements are not traditionally part of the development of an external marketing campaign. Therefore, while marketing for these additional elements must still occur, the context is very different. It is hoped this research will bring to the forefront once again the very important concept of internal marketing. Some implications for future research include further examination of the change process when there is a connection of the people to the ‘place’ name. From the current research, it appeared that much of the discontent was caused by the possible disconnect of the institution to its people and geographic location as a result of the new brand. Additionally, while this research has presented some of the possible barriers to be faced during the Control or ‘transformation’ stage, the current study did not uncover possible strategies and/or tactics for addressing this process. Further research in this area would provide a valuable framework for management of the change process. Particularly, focus


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could be placed on the appropriate communication strategies including message content, language, media choice, sender, and so on. Finally, there needs to be additional research that would attempt to apply this model in other re-branding situations to determine if there needs to be further refinement of the model. Case study unit epilogue One year after the name change was finalized, the situation at the university is very positive. The internal university community, as well as the community at large quickly accepted the decided name. Once it was confirmed that geographic location would be reflected in the name, supporters quickly stepped forward. Therefore, the resistance was not so much an issue that people did not like the idea of a name change; they simply opposed the initial proposition and the manner or lack of consultation. This led to complaints about the change process. Some respondents have acknowledged that everyone was not consulted the way they should have been and that it was the key reason behind the controversy. People were upset about the method and manner of communication and they were confused about the origin of the new name options. One manager indicated, however, that he did not believe the community had a role to play in the new name decision. This begs the question ‘who are the stakeholders that should be acknowledged?’ Similarly, the same manager speculated on how much consultation was appropriate. Specifically, he said, ‘debate is good but somebody has to make a final decision’. Aside from sponsorship of one community sporting event to promote the new name, there was not any other specific action taken by the institution to improve relationships affected negatively. Any negative feelings appeared to quickly dissipate with the introduction of the final name.

Notes on contributors Sherry Finney is an Associate Professor in the Department of Organizational Management at Cape Breton University (CBU), Nova Scotia, Canada. She received a Bachelor of Business Administration from CBU, a Master of Business Administration from Saint Mary’s University, Canada and a PhD from the University of Warwick, UK. Her research interests include internal marketing for change management, tourism marketing, and case research/writing. Mette Scherrebeck-Hansen completed her degree in marketing at Cape Breton University, Nova Scotia, Canada and was the recipient of a graduate award for outstanding leadership and contribution to quality of life at CBU. She currently works in Denmark as a project manager in Interactive Marketing for Ecco Shoes Corporation.

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